New Delhi: Daiichi Sankyo Co., Japan’s third largest drug maker, won approval from the Indian government to buy Ranbaxy Laboratories Ltd for $4.7 billion (Rs19,881 crore) after overcoming regulatory hurdles that delayed the takeover.

Daiichi Sankyo was cleared to acquire 34.8% of Ranbaxy from chief executive officer Malvinder Singh and his family, said Yasuki Minobe, a spokesman for the Tokyo-based company. It will also offer to buy a further 20% from investors between 16 August and 4 September, ICICI Securities Ltd, which is managing the tender, said in a statement.

The Japanese drug maker agreed to the acquisition on 11 June to enter the generic drug market, where sales are rising twice as fast as for branded medicines. Daiichi Sankyo said on 31 July it was delaying the offer that had been scheduled to start on 8 August. Ranbaxy fell 1.52% to close at Rs516.05 in Mumbai, reversing an earlier gain of as much as 3.8%. Daiichi gained 3.5% to 3,250 yen (Rs1,278) at the close in Tokyo.

The Rs737-a-share offer is still 43% more than Ranbaxy’s closing price on Tuesday. Daiichi Sankyo will also buy a portion of about $1 billion of preferential stock.

The Japanese drug maker got approval from the Indian government on Monday to purchase shares of Ranbaxy and its unit Zenotech Laboratories Ltd, paving the way for the transaction process to proceed.

Ranbaxy agreed in October 2007 to buy 45% of Hyderabad-based Zenotech to gain access to the $65 billion market for biotechnology treatments.

Daiichi plans to spend Rs85 crore to buy 20% of Zenotech from the public, as required by Indian takeover rules. Shares in Zenotech rose 1.21% on Tuesday to close at Rs112.90 on the Bombay Stock Exchange.